Japan's CRM Market To Hit $6.8 Billion By 2006

Japan will rely more on CRM solutions rather than in-house technologies to forge stronger ties with customers.

The customer relationship management (CRM) solution market in Japan is expected to grow at a compound annual growth rate (CAGR) of 18.3 percent to reach US$6.8 billion in 2006, up from US$2.9 billion in 2001, said IDC Japan.

Investment on software, including packaged applications and infrastructure software, accounted for 14.7 percent of the total investment in the Japanese CRM solution market.

IT services such as IT consulting, implementation, support, training, and outsourcing/management accounted for 54.5 percent while investment on other areas such as hardware, network devices, and communication services accounted for 30.8 percent.

The investment on IT services is the most promising segment with an expected CAGR of 18.9 percent until 2006.

Among all the vertical industries in Japan, the financial sector took the largest chunk of market share of US$1.1 billion, or 37 percent, of the total CRM solution investment in 2001. However, the communication/utilities and distribution sectors are expected to have the highest growth rate from now until 2006, with a CAGR of about 20 percent each.

One main reason behind the growth is because of a shift from product-oriented management to customer-oriented management in the distribution sector as well as an intensifying competition to retain customers in the communications/utilities sector as deregulation progresses.

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